Repo Rate

They do it all the time ? stepping out of the car, getting into an elevator, in closed-door meetings with treasurers or maybe while delivering a quiet after-dinner talk in an academic assemblage. Their words often capture the imagination of the listeners, sparking a new debate. On occasion the markets shrug this off after a knee-jerk reaction and there are times when impromptu one-liners tossed to reporters take on a life of their own seconds after being flashed on millions of newswire screens.

NEW DELHI: The Reserve Bank of India is likely to hit the pause button in its policy review meet on April 7, but might go for a 25 basis points cut by June, says a report by DBS. According to the financial services firm, after surprise reduction in policy rates in March, no rate cut move is expected in the April 7 annual policy meet of the central bank. "After the off-cycle cut in March, no move is likely in April, but accompanying remarks will be of interest," ...

NEW DELHI: In line with market expectations, RBI Governor Raghuram Rajan kept repo rate and CRR unchanged, while cutting SLR by 50 basis points to 21.5% from 22%. "In order to create space for banks to expand credit, the SLR is being reduced from 22.0 per cent of NDTL to 21.5 per cent. Banks should use this headroom to increase their lending to productive sectors on competitive terms so as to support investment and growth," RBI said. RBI has indicated that "key to...

Definition: Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation. Description: In the event of inflation , central banks increase repo rate as this acts as a disincentive for banks to borrow from the central bank. This ultimately reduces the money supply in the economy and thus helps in arresting inflation.

NEW DELHI: State-owned Union Bank of India has deferred its plan to raise Rs 1,386 crore fund through qualified institutional placement (QIP) to the next fiscal. "We have got everything in place. We will hit the market at the right time. We have taken approval for Rs 1,386 crore (fund raising) through QIP," Union Bank of India Chairman and Managing Director Arun Tiwari told PTI. Last year in June, the bank had taken shareholders' nod for extension of approval...

NEW DELHI: State-owned Bank of Baroda (BoB) has revised downwards the interest rate for deposits below Rs 1 crore for a select maturity bracket. "The Bank has decided to revise rates of interest payable on Domestic Term Deposits & NRO Deposits of below Rs 1 crore, applicable to fresh deposits and renewal, with effect from March 24, 2015. The applicable rate of Interest in the maturity range of 181 to 270 days has been reduced from existing 7.75 per cent to 7.65...

NEW DELHI: In a move that cheered markets and India Inc, RBI governor Raghuram Rajan on Wednesday cut repo rate by 25 basis points to 7.5% from 7.75%. The move comes on the back of lower inflation and Rajan's thumbs up to measures announced by Finance Minister Arun Jaitley in Budget 2015. "The fiscal consolidation programme, while delayed, may compensate in quality, especially if state governments are cooperative. Given low capacity utilisation and still-weak indicators of production and...

Put simply, the repo rate is simply the annualised interest rate at which banks borrow money from the Reserve Bank of India (RBI) over a short term. This is generally seen as a way of tiding over a short-term liquidity crunch that is experienced by banks. However, to understand how this works, we need to understand the word repo. Repo technically stands for the word repurchase agreement. Most banks generally have a certain amount of government bonds or securities in their possession.

The Reserve Bank of India has done it again. In the recently announced credit policy in January' 06, it has again increased the repo rate as well as the reverse repo rate. In the Credit Policy review done in January' 06, the RBI has hiked the repo rate - the rate at which RBI lends to banks - from 6.25 percent to 6.50 percent. Repo rate is used to repo rate, used to add funds to the market. It has also hiked the reverse repo rate - a short-term benchmark rate in the money market -...

MUMBAI: Call rates ended below the repo rate of 6% for the second consecutive session at the overnight call money market on Tuesday following abundant liquidity in the system amidst receding demand while government security prices staged a late mild rally after early hesitation. Call rates closed around 5.60-5.70% , mildly higher from the previous levels of 5.50-5.60% after trading in a range of 5.60-6.10% . Call rates opened around 6.00-6.10% . Ample liquidity in the banking system could be gauged from the...

There was a sense of the inevitable about it. On Wednesday when the Reserve Bank of India (RBI) raised interest rates, it was merely joining a host of other central banks ? of Indonesia, Brazil, Vietnam and the Philippines ? that had already done so earlier in a bid to rein in inflation. Last weekend, China raised reserve requirements (for the fifth time in the year by 100 basis points to 17.5%). The 25-basis points hike in the RBI's repo rate (rate at which it lends to banks)

NEW DELHI: Stars are "gradually aligning" for the Indian economy and it is expected to clock a growth rate of 7.4 per cent in the current financial year, which is likely to improve further to 8.3 per cent by 2016-17, says an HSBC report. According to the global financial services major, GDP growth in the first three quarters of the current fiscal year (ending March) has averaged 7.4 per cent, y-o-y -- an improvement over the previous year and the trend is likely to continue in...

NEW DELHI: The Reserve Bank of India on Friday said it is in discussion with the government on issues related to the creation of an independent public debt management agency, including the timing. RBI deputy governor SS Mundra said concerns were expressed over the timing and all related issues need to be examined. "Ultimately, there are reflections, implications of both of these things on the monetary policy," he said. On the monetary policy framework, Mundra said,...

NEW DELHI: Reserve Bank Deputy Governor S S Mundra today said that he expects banks to cut interest rates as the central bank has already lowered policy rates twice in quick succession. "RBI, in very short period of time, has cut repo rate twice. It is expected from the bankers that they pass on the benefits (to consumers)," he said on the sidelines of an event here. The Reserve Bank has lowered interest rates by 0.50 per cent since January 2015, but...

NEW YORK: The Federal Reserve on Monday awarded $112.06 billion of overnight fixed-rate reverse repurchase agreements to 43 bidders at an interest rate of 0.05 per cent, the Federal Reserve Bank of New York said on its website. On Friday, the US central bank allotted $98.04 billion in three-day reverse repos to 36 bidders including Wall Street dealers, money market mutual funds and mortgage finance agencies, also at an interest rate of 0.05 per...

MUMBAI: The Reserve Bank of India's decision to keep liquidity stance as it is while reducing interest rate partly explains why the half-a-percentage point reduction in the key policy rate is not benefiting borrowers. On the contrary, bond yields are higher than what they were before January 15 surprise interest rate-cut. The RBI's cap on lending to banks at just 0.25% of the net demand and time deposits at the repo rate may well be the reason why rates are not easing...

The central bank on Monday cut the repo rate by 100 basis points to further ease liquidity in the financial system. The rate at which the RBI repurchases government securities from commercial banks is an important tool which now signals that banks should lend cheaper. The repo cut was sharper than what the market had expected, coming as it does just a few days before the central bank is to unveil its credit policy. Some more steps to provide additional liquidity may be announced by the RBI on Friday.

By Rishi Mehra The Reserve Bank of India (RBI) early March surprised everyone by reduced the policy rate by 25 basis points (bps) to bring down the repo rate to 7.5%. This follows another surprise move in early January this year when it cut the reverse repo rate or the rate at which the central bank drains excess liquidity from the banking system by 25 basis points to 6.75 per cent. Analyst and experts were of the view that this rate cut from the Central Bank will lead to a...

NEW DELHI: The government is likely to nudge public sector banks (PSBs) to pass on rate cuts to retail borrowers after the Reserve Bank of India (RBI) announced a 25 basis points or 0.25% cut on repo rate last week. The issue may be discussed on Wednesday, when Finance Minister Arun Jaitley is due to meet heads of PSBs to review their quarterly performance. A senior finance ministry official told ET that banks may be asked to transmit the benefit early to...